Comptroller and Auditor General Report for 2010

The annual report of the Comptroller and Auditor General contains lots of useful information. However, one criticism I would level at the report is its use of an accounting framework that differs from the General Government Budget that we report to Brussels.

The report states that “Overall State expenditure in 2010 was €53.8 billion, a reduction of 9.5% on the 2009 level” figures that are being widely reported in the news today. The report also lists “Total Receipts” at €35.6 billion up from €34.7 billion the year before.

However, if one looks at the more comprehensive accounts that we provide to Brussels—and which are used as the basis for reporting and compliance with our EU-IMF programme—one finds (page 49) that total expenditure by the Irish government last year was €103.2 billion while total revenues were €53.2 billion.

The €103.2 billion expenditure figure includes €30.8 billion for promissory notes, and one can understand that there are various possible accounting treatments for these notes. However, that still leaves non-promissory-note spending at €72.4 billion, almost twenty billion higher than reported by the C&AG. So despite the use of “overall” and “total”, it’s pretty clear that these are not overall totals at all.

Some of these differences are accounted for by the exclusion of capital spending and on the tax side there’s differing treatment of PRSI contributions. I could go on listing other differences but, frankly, who cares? The GGB figures provided to Brussels are the most comprehensive indicators of our fiscal position and they are being closely watched by the EU and IMF.

As I’ve written about before, these kinds of figures also mislead the public about key magnitudes, thus undermining public debate about fiscal options. For example, you will hear various expenditure items compared against a total tax revenue figure of €31.7 billion—those who’ve read the C&AG report will think total revenue was €35.6 billion. This usually ends up distorting the actual fraction of revenues devoted to these expenditures.

16 replies on “Comptroller and Auditor General Report for 2010”

The continued decline in gross fixed capital formation is shocking – never a fan of Keynes but he must be spinning in his grave – all that spare capacity going to pay off dodgy counterfeit paper.
Therefore we must export a massive trade surplus(run to stand still) to these lucky paper holders.
And to think we could have built 2 Irish sea rail tunnels with the 2006 capital formation figures alone !! when that route is one of the busiest or at least was the busiest of short haul air routes.
Maybe its for the best – we are just preprogrammed to build houses – clockwork Bob the Builders really.
At least we get a friendly tap on the head – what more could you ask for ?

That seems to explain why government debt is being reported by RTE on the lunchtime news as 148 billion.
Remind me what it was in 2008.

In a private sector company the ‘official regulatory accounts’ would be dwarved internally by reams of management accounts, and performance management systems (including non ledger data). Such would be provided on a lot more timely basis, with directly accountable middle management required to explain/fix issues.

I can assure you, you’re only seeing the tip of the iceberg of information deficiency in the PS. This deficiency is both allied to underinvestment, but more importantly cultural issues, where value for money is mostly not understood, let alone appreciated or chased.

Professional fees are still in the stratosphere. Is this how Lenihan and company saw the balance sheets of legal and financial elites best repaired? It would be interesting to see an hourly breakdown of fees.

Jargon is a great way of making thins seem inaccessible. Here jargon isn’t really available. Instead we have “ordinary words” – but you can still stop the public understanding by using the same ordinary words to mean lots of different things.

The disadvantage, compared with using jargon, is that although it keeps the public dependent on “experts” to tell them what it means, the experts have to try to remember what meaning is supposed to be attached to each ordinary word, in which context.

Its a good job there is no particular requirement currently, for the public to be encouraged to understand the state’s finances.


“but you can still stop the public understanding by using the same ordinary words to mean lots of different things.”

Misinformation? I hope PR Guys aren’t being lined up for the blame here!! These are the tricks of accountant-wallahs, not wordsmiths.

I’d also add, that in general ‘regulatory accounts’ tend to have a statuatory, or other legal basis. Thus interpreting regulatory accounts is quite difficult, and getting valuable information from them, can require a lot of expertise and slog.

Management accounts, and other performance management reports, are written with the primary intention of being useful (and thus understandable), as against merely complying with some regulation.

And furthermore…as competitive issues mostly don’t arise, we should expect the PS to publish ALL of their ‘management control’ reports, and make all non personal information freely available.

Then…imagine…we could have evidence based fiscal policy debates…as well as micro debates per policy area…

I know I’m probably wasting my time, but I’l ask it again. Is there anyone out there with the ability to develop, or interest in developing, pro forma balance sheets and income and funds flow statements derived on a consistent basis from these ‘tennis club’ accounts that seem to change with every bounce of the ball?

And, grumpy, I don’t think there’s a deliberate intent to mislead. These figures are presented on a different basis to that used to present numbers ot the EU, IMF etc. In the absence of the pro forma accounts i would like to see, a simple reconcilation table should do the trick.

The intent to mislead is in other areas where all the deliberations are being conducted behind closed doors, when there is a requirement to make a public announcement and the announcement attempts to create a reality totally at variance to what is going on behind the scenes – but which is sufficiently economical to provide enough wriggle room to be consistent with what ever more comprehensive decision will be announced at a later stage as a fait accompli.

This is what is truly maddening and is far more important than these numerical differences which may be reconciled.

@Paul Hunt
The underlying financial management systems and processes are not up to the task of easily producing different cuts of the same information. Hence the apparent consistency problems.

Believe me, PS accounting is Stone Age…and we could make money by inviting archaelogists/’history of accounting’ academics over here to study it.

@Desmond Brennan

“Believe me, PS accounting is Stone Age…and we could make money by inviting archaelogists/’history of accounting’ academics over here to study it.”

Not quiet true. Central Government or Vote Accounts are indeed Stone Age in that they are recorded on a cash receipts basis.. But most other PS financial statements (quangos etc.) are GAAP compliant and pretty much the same as the private sector.


I know. I was exaggerating in order to get a point across. Think attempted non-pointless, dry humour.

Your suggestion is the sort of thing I could imagine being requested of a graduate trainee somewhere in another context.

I sometimes wonder what all the keen, nerdy economics post-grads – that don’t spend too much time in the pub – do with their curiosity about economics.

The role of the C&AG in my understanding is to provide independent assurance that public money is properly managed and spent to good effect, I stand to be corrected.

The position of C&AG is a constitutionally enshrined position and its holder cannot be removed from office except for stated misbehaviour or incapacity, and then only upon resolutions passed by the Dáil and Seanad calling for such removal. This gives the office important independence in its work. There is also no limit on the term of office.


@ Grumpy: “I sometimes wonder what all the keen, nerdy economics post-grads – that don’t spend too much time in the pub – do with their curiosity about economics.”

Funny you should ask this. Am in an MA class (25 No. grads, 2 No. faculty) – ‘International Financial Crisis’. Won’t say the college, it would be embarassing.

Knowledge, understanding and implications of …. for economic activity in a REAL world economy.

1. FIRE economy: 0
2. THAT 2nd Law: 0
3. Money: 0
4: Wealth: 0
5: Exponents: 0

And the idea that there is such a thing as an economic Model-in-Use!!! I was told, – “Capitalism – ’cause that’s the best”.

Our time? Spent reading wordy (turgid and almost incomprehensible, mostly) journal articles or chapters from a favourite bible. “Never mind the quality, look at the quantity!”

Apologies to all for the somewhat off-topic ‘rant’, just could not let Grumpy question go unanswered. “So, now you know how its made!”

Brian Snr.

@ All

On the report, some of the radio news bulletins and the papers are running with e4bn written off from the pension fund into the banks – horror.

Would anyone knowledgeable care to say if this is new news, or has it already been taken into account?

@ Gavin

No real big news there. At the 31st December 2009 the shares in AIB and B of I were valued at cost but at 31st December 2010 they were valued at Fair Market Value resulting in a Unrealised loss on AIB of €2.14 Billion and on B of I of €1.6 Billion.

The Worse scandal is that Report on page 11 states that the at the 31 December 2009 that the total of accrued liabilities in respect of Public Servants was €116 Billion up €15 Billion from the amount outstanding at the 31 December 2008. This figure will be €150 Billion by the end of February 2012 because of the accelerated retirement scheme for Public Servants. Of course none of our economists will comment on these liabilities being underwritten by the Taxpayers preferring to bang on about Banks and Bonds. The University Schemes had up to 2009, before we the Tax payers were saddled with their liabilities, more liabilities to serving pensioners than they had in Pension Fund assets, with further liabilities attaching to serving staff of €3.2 Billion unfunded. These are the same people that like to lecture to us !!! Where was St Morgan and DMcW when all this was happening ? The Pension Funding Crisis will bring this country to it’s knees because all of these goodies doled out to Public Servants cannot be paid for.

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